 The Effects of Group Incentives in an Indian Firm: Evidence from Payroll DataLABOUR, 2005, vol. 19, issue 1, 147-173 Abstract: Abstract. This paper estimates the effects of group incentives on productivity, pay and employment in a large unionized firm in India. Using plant‐level monthly time‐series data from the payroll office for the period 1985–95, and controlling for both (plant) fixed effects and (contract) time effects, the paper provides econometric evidence on the effectiveness of both the level and intensity of incentive pay on the outcome measures. In addition, the relative performance of two types of group incentives defined on the basis of group size is also analysed. The results generally confirm predictions from theory that productivity returns to incentives are non‐linear and concave in shape and that the effectiveness of incentives is decreasing in group size. It is argued that the latter is most likely due to the lessening of the free‐rider problem and the increased effectiveness of peer monitoring associated with smaller groups. The results also point to a negative relationship between the level of incentives and employment over time. Date: 2005 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:19:y:2005:i:1:p:147-173 Ordering information: This journal article can be ordered from Access Statistics for this article LABOUR is currently edited by Franco Peracchi More articles in LABOUR from CEIS Contact information at EDIRC. |
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